A Note to the Editor on

A description of the current status of inventory theory, which has advanced considerably in the past 10 years. The major theoretical advance is the demonstration that a single critical number represents the optimal inventory policy in many inventory situations. This policy holds for probabilistic demand distributions, convex holding and shortage costs, and constant reorder costs. It also holds for procurement lead times with backlogging. Inventory theory can now deal with certain important features of multiple echelons, and it has been demonstrated that "simple" optimal policies apply. Finally, the assumption of known demand function is no longer required. It has been shown that for a wide class of statistical distributions of demand with unknown parameters, the optimal policy in each period depends on two variables: the current stock and the average past demand. A summary of the main results obtained on inventory theory to describe its current status. The paper considers deterministic and probabilistic inventory models, distinguishes between one-period and N-period models, and stresses the implications of the state of inventory theory. This theory provides solutions to a wide class of inventory problems, and the effective use of these techniques can do much to introduce greater rationality and efficiency into inventory management.